Matt Hardigree

Shanghai Automotive (SAIC) has devoured the smaller Nanjing Automobile to make an even larger state-owned automotive company. In the deal, SAIC gets increased capacity in order to compete with foreign car companies and Nanjing will get approximately 320 million shares of SAIC. Though we've had a bit of bad luck with mergers (Daimler-Chysler, Ford-Volvo, GM-Krispy Kreme), the market in China is still rather young and consolidations of this type can often be beneficial for everyone involved.

Well, at least we can say that there's a better chance of this working out than that SAIC-MG merger that never ended up going anywhere. [Bloomberg News via IHT]